Accounting
The cost of the cushions that are used to manufacture sofas is best described as a:
variable cost
Manufacturing overhead includes:
all manufacturing costs except direct labour and direct materials.
Materials used in the operation of a factory, such as cleaning supplies, that are not an
integral part of the final product should be classified as:
manufacturing overhead
The one cost that would be classified as part of both prime cost and conversion cost would
be:
direct labour
Direct costs:
can be easily traced to a particular cost object
prime costs consist of
direct labour and direct materials
The annual insurance premium for the factory building would be a:
fixed cost, product cost, indirect cost
Which of the following statements about product costs is true?
Product costs associated with unsold finished goods and work in process appear on the
balance sheet as assets.
Conversion costs consist of:
direct labour and manufacturing overhead.
Which of the following is an example of a period cost?
Advertising cost for a new product campaign.
Direct labour costs must be
Allocated to the manufacturing departments
Within the relevant range, variable cost per unit will
remain constant
Which of the following would probably be the least appropriate allocation base for
allocating overhead in a highly automated manufacturer of specialty valves?
direct labour-hours
The contribution margin per unit is divided by selling price to calculate
contribution margin %
The fixed cost is divided by contribution margin per unit to calculate
breakeven number of units
A standard cost:
is a budget for the production of one unit of a product or service.
Which of the following is a predetermined estimated cost that can be used in the
calculation of a variance?
standard cost
Variances are computed by taking the difference between which of the following?
Actual cost and standard cost.
Which of the following correctly lists all the information needed to calculate a labour rate
variance?
Actual labour rate, standard labour rate, and actual hours worked
Which of the following variances are most similar with respect to the manner in which
they are calculated?
Material usage variance and labour efficiency variance